Downturn has hurt even tonier parts of Valley

Geography and price have been key factors in how the market's epic downturn has played out across metro Phoenix.

Ever since home values peaked in 2005 and 2006, the timing and pace of price readjustments have been specific to each community.

The latest Valley Home Values data, provided by Phoenix-based Information Market, tells the story of how those price changes continued to evolve through the first eight months of the year.

The data reveal pockets of relatively steep price declines in more expensive neighborhoods, bolstering analysts' suspicions that higher-priced homes would follow the downward trajectory seen in lower-priced communities in 2008 and 2009.

For example, the median home price fell about 14 percent in Paradise Valley, the Phoenix area's most expensive residential community, from Jan. 1 to Aug. 31. It was the second-biggest decline among cities and towns.

The most dramatic median-price drop for a community during the period measured was in Waddell, an upscale West Valley community along the eastern border of White Tank Mountain Regional Park. Home prices there fell about 21 percent.

Even Tempe, which had experienced relatively mild price decreases during the slump's first two years, has been among the five worst-performing markets this year, with the median sale price falling more than 9 percent.

Real-estate agents and analysts have said for months that residents in the Phoenix area's higher-priced communities were more financially stressed than was apparent in home-sales figures in 2008 and 2009.

Analysts cite two main reasons for upscale communities' late arrival to the housing crash: Homeowners' deeper pockets allowed them to endure the financial strain of an overpriced mortgage longer, and lenders have been in no hurry to repossess homes priced too high for most buyers.

Jay Butler, an associate professor of real estate at ASU's W.P. Carey School of Business, said foreclosure homes have been selling in some areas for more money than non-foreclosure homes, in part because more high-end homes have been going back to the bank.

Rosalie Soward, a Valley real-estate agent also licensed in California who specializes in short sales, was among those who expected to see "distress sales" accelerate in higher-priced Valley neighborhoods. Soward told The Republic in May that in California's Orange County, it was routine to see foreclosures and short sales on million-dollar homes.